Saturday, July 1, 2017

Brit Hume misreads a graph and unintentionally parrots a White House talking point

Fox News pundit Brit Hume complained about this graph from the Congressional Budget Office's report on the Senate Better Care Reconciliation Act (BCRA):

Here's Hume's tweet, replying to an article by Jonathan Cohn claiming that the BCRA would reduce Medicaid by 26% on 2026 and by 35% on 2036, which is exactly what the CBO suggests in its report:

The graph isn't misleading at all if you bother to read its title, X-axis labels, and source. What Hume is doing here is to unintentionally parrot a White House talking point, calling the future shrinkage of Medicaid not a “cut”, but a “reduction in the rate of increase.”

The way we use words frame discussions, so I tweeted at Hume with the following analogy, which all pundits can grasp (I certainly can!): Imagine that I hire you for the next 20 years, and our contract limits your yearly salary “increase” to just 1% a year. Then, we let inflation play its magic. After two decades, when comparing your purchasing power in 2037 to the one in 2017, wouldn't you call that a “cut”? You'd certainly experience it as such, if inflation stays at its current level.

This isn't a great analogy —for one thing, I don't know if Medicaid increases take into account the rising costs of healthcare. However, I was just trying to illustrate the difference between absolute change and relative change, and the fact that “increases” are always relative to variables like needs. In the case of Medicaid it's not just inflation (if it isn't built in already) that may have pernicious effects in the future, but also predicted variations in population size, its composition, economic growth, number of Medicaid recipients (gross expense vs. per capita expense,) societal expectations, etc. I'm no expert, but that is what the CBO said.

Hume then replied to my tweet:

His response unleashed a barrage of abuse from the troll horde that follows him, which also attacked Cohn. Some accused me of engaging in “liberal Math” and many xenophobic goons told me to go learn some English. Not a bad suggestion, I'll admit, but, as I'm busy, I decided not to waste time replying to each of them. I erased my tweet, and decided to write this post instead.

What the White House and its propaganda machine are doing —and I'm not claiming that Hume is part of it; he strikes me as a polite and professional fellow— is to twist the English language the aforementioned trolls claim to cherish. They do it to sugarcoat their message, as they know that cuts to the safety net —present and projected— are unpopular.

Contrary to what Hume claims, an increase that doesn't keep pace with projected inflation and other relevant factors, like the number of people predicted to need aid, is not an increase, unless that you believe that the piece of paper below has value on its own, independent of the economy:

That isn't how money works. To quote Charles Wheelan's wonderful Naked Money, “it is a piece of paper with no intrinsic value.” Here's how I reason about this: Let's say that I give my kid $10 dollars a week, which he uses exclusively to pay for his favorite hobby, ice skating. I drive him to skate with his friends every Friday evening.

Then, at the end of 2017 I decide to increase my kid's 2018 ice skating allotment to $11. Is that a real increase? It depends. In isolation, it sounds like it. My kid will be receiving 11 wrinkled sheets of paper instead of 10, after all.

But if the cost of an evening of ice skating changes to $12 and I can't drive him anymore, so he needs to pay $1 for the bus, my kid will lose purchasing power. And here comes the critical part, which is what companies and governments do all the time to control future expenses: If somehow I can predict —with the always unavoidable uncertainty attached to any long-term forecast— that ice skating will get that expensive next year, and that my kid will need to take the bus, I'll be doing something akin to cutting his allotment by adding just $1 to it.

(Imagine then that I also predict that my younger daughter will also become a fan of ice skating soon, and will really need to practice it. However, I decide in advance not to give her an allotment, but to split the current one in half, and keep increasing it just $1 a year.)

That's why many are talking about future “cuts” to Medicaid, even people that —not like me— are native English speakers. See this explainer by the Washington Post, this critique of a White House graph by, and Cohn's own tweetstorm.

That said, if Hume's problem is with the word “cut” itself, I'll agree to stop using it. In return, I'd ask him and the White House to abandon the term “rate of increase” in this case, as may be equally misleading. Let's call Medicaid's future reduction a “covfefe” instead. The underlying reality won't change, as numbers are stubborn creatures: Medicaid will be roughly 1/4 smaller on 2026 and more than 1/3 smaller on 2036 in comparison to the original baseline. Exactly what the chart represents.

You may argue that this'd be a good thing —I happen to be a moderate European-style fiscal conservative— or a bad one, but a covfefe is a covfefe.

UPDATE: My friend, economist Jon Schwabish, author of Better Presentations, has sent me the following suggestions for the example:
—You tell your son that you are going to give him an extra 2 dollars every month to keep up with rising costs of ice skating (skate rental, ice time, whatever). He will get $10 in January, $12 in February, $14 in March, and so on. Over the course of the year, he will have received $252 in total allowance.
—You then decide you are not going to give him as much and instead you increase his allowance by $1 per month: He'll get $10 in January, $11 in February, $12 in March, and so on. Over the course of the year under this scenario, he will have received $186 in total allowance.
—Under the new world in which he gets a $1 increase per month instead of $2, his allowance is still growing over the period (you could even make those increases rise with inflation, so there is no actual loss of purchasing power), but it's less than the original promise; in CBO-speak, the original is the baseline and the new world —where he gets the $1 increase— is the new policy.
—That's what's happening in the Medicaid debate. Under BCRA, Medicaid spending grows more slowly than the baseline. I can see Hume's point of not calling that a cut, because there is a connotation that the word “cut” implies a literal decline, which is not what happens in BCRA. That being said, there is a cut relative to the rate of Medicaid growth relative to the baseline, but not absolute dollars.
That is, I guess, if health care cost growth is indeed factored in already, and other aforementioned variables —possible population size, age composition, Medicaid recipients, etc.— are considered correctly. In any case, as I said, let's just find a new term we can all agree on, and call this a covfefe.